NVIDIA CORPORATION |
(Exact name of registrant as specified in its charter) |
Delaware | 0-23985 | 94-3177549 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
2788 San Tomas Expressway, Santa Clara, CA | 95051 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.001 par value per share | NVDA | The Nasdaq Global Select Market |
NVIDIA Corporation | ||
Date: May 16, 2019 | By: /s/ Colette M. Kress | |
Colette M. Kress | ||
Executive Vice President and Chief Financial Officer |
GAAP | ||||||||
($ in millions, except earnings per share) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y | |||
Revenue | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% | |||
Gross margin | 58.4 | % | 54.7 | % | 64.5 | % | Up 370 bps | Down 610 bps |
Operating expenses | $938 | $913 | $773 | Up 3% | Up 21% | |||
Operating income | $358 | $294 | $1,295 | Up 22% | Down 72% | |||
Net income | $394 | $567 | $1,244 | Down 31% | Down 68% | |||
Diluted earnings per share | $0.64 | $0.92 | $1.98 | Down 30% | Down 68% |
Non-GAAP | ||||||||
($ in millions, except earnings per share) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y | |||
Revenue | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% | |||
Gross margin | 59.0 | % | 56.0 | % | 64.7 | % | Up 300 bps | Down 570 bps |
Operating expenses | $753 | $755 | $648 | -- | Up 16% | |||
Operating income | $557 | $479 | $1,428 | Up 16% | Down 61% | |||
Net income | $543 | $496 | $1,285 | Up 9% | Down 58% | |||
Diluted earnings per share | $0.88 | $0.80 | $2.05 | Up 10% | Down 57% |
• | Revenue is expected to be $2.55 billion, plus or minus 2 percent. |
• | GAAP and non-GAAP gross margins are expected to be 59.2 percent and 59.5 percent, respectively, plus or minus 50 basis points. |
• | GAAP and non-GAAP operating expenses are expected to be approximately $985 million and $765 million, respectively. |
• | GAAP and non-GAAP other income and expense are both expected to be income of approximately $27 million. |
• | GAAP and non-GAAP tax rates are both expected to be 10 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis. |
• | Introduced the NVIDIA® CUDA-X AI™ platform for accelerating data science. |
• | Announced availability of NVIDIA T4 Tensor Core GPUs from leading OEMs, as well as Amazon Web Services. |
• | Partnered with top global system builders to create powerful data-science workstations integrating NVIDIA Quadro RTX™ GPUs and NVIDIA CUDA-X AI. |
• | Launched beta access to NVIDIA Quadro® Virtual Workstation software in the Alibaba Cloud Marketplace. |
• | Teamed up with the American College of Radiology to use the NVIDIA Clara™ AI toolkit to enable its members across the U.S. to create and use AI for diagnostic radiology in their own facilities. |
• | Introduced the GeForce® GTX® 1660 Ti, GTX 1660 and GTX 1650 gaming GPUs with improved performance and efficiency for today’s most popular games. |
• | Announced a record number of gaming laptop models based on Turing GPUs from the world’s top makers, bringing the total launched this year to nearly 100. |
• | Announced that real-time ray tracing is now integrated into Unreal Engine and Unity, the world’s most popular commercial game engines. |
• | Announced expanded adoption of NVIDIA RTX ray-tracing technology by the world’s top 3D application providers. |
• | Unveiled the NVIDIA Omniverse open-collaboration platform to simplify creative workflows for content creation. |
• | Partnered with Toyota Research Institute-Advanced Development to develop, train and validate self-driving vehicles. |
• | Unveiled NVIDIA DRIVE™ AP2X, a complete Level 2+ automated driving solution encompassing DRIVE AutoPilot software, DRIVE AGX and DRIVE validation tools. |
• | Introduced NVIDIA DRIVE AV Safety Force Field to enable safe, comfortable driving experiences. |
• | Announced availability of the NVIDIA DRIVE Constellation™ autonomous vehicle simulation platform. |
• | Launched Jetson Nano™, an AI computer that makes it possible to create millions of small, low-cost, low-power devices. |
• | Announced free public availability of NVIDIA Isaac SDK™ as a robotics developer toolbox for accelerating innovation and deployment. |
• | Announced that the NVIDIA Jetson™ AI computer platform now supports Amazon Web Services RoboMaker. |
• | Teamed up with AWS IoT Greengrass to enable customers to deploy AI and deep learning to millions of connected devices with NVIDIA Jetson. |
• | Collaborated with Microsoft to make cities smarter by integrating NVIDIA DeepStream Edge AI and Microsoft Azure IoT. |
Simona Jankowski | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
sjankowski@nvidia.com | rsherbin@nvidia.com |
Three Months Ended | |||||||||
April 28, | April 29, | ||||||||
2019 | 2018 | ||||||||
Revenue | $ | 2,220 | $ | 3,207 | |||||
Cost of revenue | 924 | 1,139 | |||||||
Gross profit | 1,296 | 2,068 | |||||||
Operating expenses | |||||||||
Research and development | 674 | 542 | |||||||
Sales, general and administrative | 264 | 231 | |||||||
Total operating expenses | 938 | 773 | |||||||
Income from operations | 358 | 1,295 | |||||||
Interest income | 44 | 25 | |||||||
Interest expense | (13 | ) | (15 | ) | |||||
Other, net | — | 6 | |||||||
Total other income (expense) | 31 | 16 | |||||||
Income before income tax | 389 | 1,311 | |||||||
Income tax expense (benefit) | (5 | ) | 67 | ||||||
Net income | $ | 394 | $ | 1,244 | |||||
Net income per share: | |||||||||
Basic | $ | 0.65 | $ | 2.05 | |||||
Diluted | $ | 0.64 | $ | 1.98 | |||||
Weighted average shares used in per share computation: | |||||||||
Basic | 607 | 606 | |||||||
Diluted | 616 | 627 |
NVIDIA CORPORATION | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(In millions) | ||||||||||
(Unaudited) | ||||||||||
April 28, | January 27, | |||||||||
2019 | 2019 | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash, cash equivalents and marketable securities | $ | 7,802 | $ | 7,422 | ||||||
Accounts receivable, net | 1,242 | 1,424 | ||||||||
Inventories | 1,426 | 1,575 | ||||||||
Prepaid expenses and other current assets | 159 | 136 | ||||||||
Total current assets | 10,629 | 10,557 | ||||||||
Property and equipment, net | 1,473 | 1,404 | ||||||||
Operating lease assets | 536 | — | ||||||||
Goodwill | 618 | 618 | ||||||||
Intangible assets, net | 54 | 45 | ||||||||
Deferred income tax assets | 601 | 560 | ||||||||
Other assets | 110 | 108 | ||||||||
Total assets | $ | 14,021 | $ | 13,292 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 368 | $ | 511 | ||||||
Accrued and other current liabilities | 815 | 818 | ||||||||
Total current liabilities | 1,183 | 1,329 | ||||||||
Long-term debt | 1,988 | 1,988 | ||||||||
Long-term operating lease liabilities | 486 | — | ||||||||
Other long-term liabilities | 660 | 633 | ||||||||
Total liabilities | 4,317 | 3,950 | ||||||||
Shareholders' equity | 9,704 | 9,342 | ||||||||
Total liabilities and shareholders' equity | $ | 14,021 | $ | 13,292 |
NVIDIA CORPORATION | |||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||||||||
(In millions, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
April 28, | January 27, | April 29, | |||||||||||
2019 | 2019 | 2018 | |||||||||||
GAAP gross profit | $ | 1,296 | $ | 1,207 | $ | 2,068 | |||||||
GAAP gross margin | 58.4 | % | 54.7 | % | 64.5 | % | |||||||
Stock-based compensation expense (A) | 4 | 6 | 8 | ||||||||||
Legal settlement costs | 10 | 21 | — | ||||||||||
Non-GAAP gross profit | $ | 1,310 | $ | 1,234 | $ | 2,076 | |||||||
Non-GAAP gross margin | 59.0 | % | 56.0 | % | 64.7 | % | |||||||
GAAP operating expenses | $ | 938 | $ | 913 | $ | 773 | |||||||
Stock-based compensation expense (A) | (174 | ) | (150 | ) | (121 | ) | |||||||
Acquisition-related and other costs | (10 | ) | (1 | ) | (2 | ) | |||||||
Legal settlement costs | (1 | ) | (7 | ) | (2 | ) | |||||||
Non-GAAP operating expenses | $ | 753 | $ | 755 | $ | 648 | |||||||
GAAP income from operations | $ | 358 | $ | 294 | $ | 1,295 | |||||||
Total impact of non-GAAP adjustments to income from operations | 199 | 185 | 133 | ||||||||||
Non-GAAP income from operations | $ | 557 | $ | 479 | $ | 1,428 | |||||||
GAAP other income (expense) | $ | 31 | $ | 30 | $ | 16 | |||||||
Gains from non-affiliated investments | — | (1 | ) | (6 | ) | ||||||||
Interest expense related to amortization of debt discount | — | — | 1 | ||||||||||
Non-GAAP other income (expense) | $ | 31 | $ | 29 | $ | 11 | |||||||
GAAP net income | $ | 394 | $ | 567 | $ | 1,244 | |||||||
Total pre-tax impact of non-GAAP adjustments | 199 | 184 | 128 | ||||||||||
Income tax impact of non-GAAP adjustments (B) | (50 | ) | (25 | ) | (87 | ) | |||||||
Tax benefit from income tax reform | — | (230 | ) | — | |||||||||
Non-GAAP net income | $ | 543 | $ | 496 | $ | 1,285 |
Three Months Ended | |||||||||||||
April 28, | January 27, | April 29, | |||||||||||
2019 | 2019 | 2018 | |||||||||||
Diluted net income per share | |||||||||||||
GAAP | $ | 0.64 | $ | 0.92 | $ | 1.98 | |||||||
Non-GAAP | $ | 0.88 | $ | 0.80 | $ | 2.05 | |||||||
Weighted average shares used in diluted net income per share computation | |||||||||||||
GAAP | 616 | 619 | 627 | ||||||||||
Anti-dilution impact from note hedge | — | — | (1 | ) | |||||||||
Non-GAAP | 616 | 619 | 626 | ||||||||||
GAAP net cash provided by operating activities | $ | 720 | $ | 898 | $ | 1,445 | |||||||
Purchase of property and equipment and intangible assets | (128 | ) | (203 | ) | (118 | ) | |||||||
Free cash flow | $ | 592 | $ | 695 | $ | 1,327 |
(A) Stock-based compensation consists of the following: | |||||||||||||
Three Months Ended | |||||||||||||
April 28, | January 27, | April 29, | |||||||||||
2019 | 2019 | 2018 | |||||||||||
Cost of revenue | $ | 4 | $ | 6 | $ | 8 | |||||||
Research and development | $ | 114 | $ | 99 | $ | 74 | |||||||
Sales, general and administrative | $ | 60 | $ | 51 | $ | 47 | |||||||
(B) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09). |
NVIDIA CORPORATION | |||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | |||||
Q2 FY2020 Outlook | |||||
GAAP gross margin | 59.2 | % | |||
Impact of stock-based compensation expense | 0.3 | % | |||
Non-GAAP gross margin | 59.5 | % | |||
Q2 FY2020 Outlook | |||||
(In millions) | |||||
GAAP operating expenses | $ | 985 | |||
Stock-based compensation expense, acquisition-related costs, and other costs | (220 | ) | |||
Non-GAAP operating expenses | $ | 765 |
GAAP | ||||||||
($ in millions, except earnings per share) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y | |||
Revenue | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% | |||
Gross margin | 58.4 | % | 54.7 | % | 64.5 | % | Up 370 bps | Down 610 bps |
Operating expenses | $938 | $913 | $773 | Up 3% | Up 21% | |||
Operating income | $358 | $294 | $1,295 | Up 22% | Down 72% | |||
Net income | $394 | $567 | $1,244 | Down 31% | Down 68% | |||
Diluted earnings per share | $0.64 | $0.92 | $1.98 | Down 30% | Down 68% |
Non-GAAP | ||||||||
($ in millions, except earnings per share) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y | |||
Revenue | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% | |||
Gross margin | 59.0 | % | 56.0 | % | 64.7 | % | Up 300 bps | Down 570 bps |
Operating expenses | $753 | $755 | $648 | -- | Up 16% | |||
Operating income | $557 | $479 | $1,428 | Up 16% | Down 61% | |||
Net income | $543 | $496 | $1,285 | Up 9% | Down 58% | |||
Diluted earnings per share | $0.88 | $0.80 | $2.05 | Up 10% | Down 57% |
Revenue by Reportable Segments | |||||
($ in millions) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y |
GPU Business | $2,022 | $1,980 | $2,765 | Up 2% | Down 27% |
Tegra Processor Business | 198 | 225 | 442 | Down 12% | Down 55% |
Total | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% |
Revenue by Market Platform | |||||
($ in millions) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y |
Gaming | $1,055 | $954 | $1,723 | Up 11% | Down 39% |
Professional Visualization | 266 | 293 | 251 | Down 9% | Up 6% |
Data Center | 634 | 679 | 701 | Down 7% | Down 10% |
Automotive | 166 | 163 | 145 | Up 2% | Up 14% |
OEM and Other | 99 | 116 | 387 | Down 15% | Down 74% |
Total | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% |
GAAP | |||
($ in millions) | Q1 FY20 | Q4 FY19 | Q1 FY19 |
Interest income | $44 | $42 | $25 |
Interest expense | (13) | (14) | (15) |
Other, net | -- | 2 | 6 |
Total | $31 | $30 | $16 |
Non-GAAP | |||
($ in millions) | Q1 FY20 | Q4 FY19 | Q1 FY19 |
Interest income | $44 | $42 | $25 |
Interest expense | (13) | (14) | (14) |
Other, net | -- | 1 | -- |
Total | $31 | $29 | $11 |
Capital Return | ||||||||
(in millions) | FY13 | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | Q1FY20 |
Dividends | $47 | $181 | $186 | $213 | $261 | $341 | $371 | $97 |
Share repurchases: | ||||||||
$ | $100 | $887 | $814 | $587 | $739 | $909 | $1,578 | $-- |
Shares | 8 | 62 | 44 | 25 | 15 | 6 | 9 | -- |
• | Revenue is expected to be $2.55 billion, plus or minus 2 percent. |
• | GAAP and non-GAAP gross margins are expected to be 59.2 percent and 59.5 percent, respectively, plus or minus 50 basis points. |
• | GAAP and non-GAAP operating expenses are expected to be approximately $985 million and $765 million, respectively. The sequential change in GAAP operating expenses reflects an increase in stock-based compensation. |
• | GAAP and non-GAAP other income and expense are both expected to be income of approximately $27 million. |
• | GAAP and non-GAAP tax rates are both expected to be 10 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis. |
• | Capital expenditures are expected to be approximately $120 million to $140 million. |
Simona Jankowski | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
sjankowski@nvidia.com | rsherbin@nvidia.com |
NVIDIA CORPORATION | |||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||||||||
(In millions, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
April 28, | January 27, | April 29, | |||||||||||
2019 | 2019 | 2018 | |||||||||||
GAAP gross profit | $ | 1,296 | $ | 1,207 | $ | 2,068 | |||||||
GAAP gross margin | 58.4 | % | 54.7 | % | 64.5 | % | |||||||
Stock-based compensation expense (A) | 4 | 6 | 8 | ||||||||||
Legal settlement costs | 10 | 21 | — | ||||||||||
Non-GAAP gross profit | $ | 1,310 | $ | 1,234 | $ | 2,076 | |||||||
Non-GAAP gross margin | 59.0 | % | 56.0 | % | 64.7 | % | |||||||
GAAP operating expenses | $ | 938 | $ | 913 | $ | 773 | |||||||
Stock-based compensation expense (A) | (174 | ) | (150 | ) | (121 | ) | |||||||
Acquisition-related and other costs | (10 | ) | (1 | ) | (2 | ) | |||||||
Legal settlement costs | (1 | ) | (7 | ) | (2 | ) | |||||||
Non-GAAP operating expenses | $ | 753 | $ | 755 | $ | 648 | |||||||
GAAP income from operations | $ | 358 | $ | 294 | $ | 1,295 | |||||||
Total impact of non-GAAP adjustments to income from operations | 199 | 185 | 133 | ||||||||||
Non-GAAP income from operations | $ | 557 | $ | 479 | $ | 1,428 | |||||||
GAAP other income (expense) | $ | 31 | $ | 30 | $ | 16 | |||||||
Gains from non-affiliated investments | — | (1 | ) | (6 | ) | ||||||||
Interest expense related to amortization of debt discount | — | — | 1 | ||||||||||
Non-GAAP other income (expense) | $ | 31 | $ | 29 | $ | 11 | |||||||
GAAP net income | $ | 394 | $ | 567 | $ | 1,244 | |||||||
Total pre-tax impact of non-GAAP adjustments | 199 | 184 | 128 | ||||||||||
Income tax impact of non-GAAP adjustments (B) | (50 | ) | (25 | ) | (87 | ) | |||||||
Tax benefit from income tax reform | — | (230 | ) | — | |||||||||
Non-GAAP net income | $ | 543 | $ | 496 | $ | 1,285 |
Three Months Ended | |||||||||||||
April 28, | January 27, | April 29, | |||||||||||
2019 | 2019 | 2018 | |||||||||||
Diluted net income per share | |||||||||||||
GAAP | $ | 0.64 | $ | 0.92 | $ | 1.98 | |||||||
Non-GAAP | $ | 0.88 | $ | 0.80 | $ | 2.05 | |||||||
Weighted average shares used in diluted net income per share computation | |||||||||||||
GAAP | 616 | 619 | 627 | ||||||||||
Anti-dilution impact from note hedge | — | — | (1 | ) | |||||||||
Non-GAAP | 616 | 619 | 626 | ||||||||||
GAAP net cash provided by operating activities | $ | 720 | $ | 898 | $ | 1,445 | |||||||
Purchase of property and equipment and intangible assets | (128 | ) | (203 | ) | (118 | ) | |||||||
Free cash flow | $ | 592 | $ | 695 | $ | 1,327 |
(A) Stock-based compensation consists of the following: | |||||||||||||
Three Months Ended | |||||||||||||
April 28, | January 27, | April 29, | |||||||||||
2019 | 2019 | 2018 | |||||||||||
Cost of revenue | $ | 4 | $ | 6 | $ | 8 | |||||||
Research and development | $ | 114 | $ | 99 | $ | 74 | |||||||
Sales, general and administrative | $ | 60 | $ | 51 | $ | 47 | |||||||
(B) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09). |
NVIDIA CORPORATION | |||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | |||||
Q2 FY2020 Outlook | |||||
GAAP gross margin | 59.2 | % | |||
Impact of stock-based compensation expense | 0.3 | % | |||
Non-GAAP gross margin | 59.5 | % | |||
Q2 FY2020 Outlook | |||||
(In millions) | |||||
GAAP operating expenses | $ | 985 | |||
Stock-based compensation expense, acquisition-related costs, and other costs | (220 | ) | |||
Non-GAAP operating expenses | $ | 765 |
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